Neenah budget: Homeowners take hit as city removes contested transportation

NEENAH — The removal of Neenah’s transportation assessment replacement fee, or TARF, from the 2025 city budget will result in a sizable tax increase for homeowners.

Neenah enacted the TARF in 2019 to help pay for street reconstruction and sidewalk infill projects. It replaced unpopular special assessments that periodically hit property owners with bills totaling thousands of dollars.

In October, Wisconsin Manufacturers & Commerce filed a notice of claim against Neenah, arguing the TARF is an illegal tax under recent court precedent.

The Common Council on Tuesday removed the TARF from the budget to avoid a lawsuit by WMC. As a replacement, it increased the debt service tax levy by $825,000, which is the amount the TARF would have generated in 2025.

After the move, the council unanimously passed the 2025 budget.

The tax bill for the owner of a $275,000 home will rise $124 next year: $44 for budgetary increases, $40 to replace the residential TARF and $40 to shoulder a share of the TARF heretofore paid by businesses and tax-exempt organizations such as churches, hospitals and schools.

“This isn’t a wash,” Finance Director Vicky Rasmussen told The Post-Crescent. “The residents are definitely being hit more. Tax-exempt people don’t pay anything on it even though they’re using the roads as well.”

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How do other communities pay for street reconstruction?

Appleton, Chilton, Green Bay, Kaukauna, New London and Oshkosh have opted for a wheel tax to replace or partially offset special assessments.

Neenah’s TARF is based on a property’s impervious surface. It was favored as a more equitable option because all property owners, even tax-exempt ones, paid a share of the costs.

The unit fee for a typical homeowner is $40. The annual charge for large businesses can consist of multiple unit fees but is capped at $3,600.

Rasmussen said TIDI Products, for example, paid $3,600 under the TARF. It will pay $2,000 next year, and the $1,600 gap will shift to other property taxpayers.

What else does the Neenah budget contain?

The budget provides a 4.5% pay increase (1.5% in January and 3% in July) for nonunion city employees and accounts for a 28.5% jump in health insurance costs due to high use and inflation. Neenah will transition back to a self-funded health insurance plan in attempt to minimize costs.

Department directors requested sixnew full-time positions — four for Neenah-Menasha Fire Rescue, one for the Public Works Department and one for the Neenah Public Library — but Mayor Jane Lang and the council didn’t fund any of them.

A proposal by council member William Pollnow Jr. to increase the salary for newly elected council members by 5%, from $5,280 to $5,544, failed on a 4-5 vote.

“The 5% is more than what we’re giving anybody else here at City Hall,” council member Lee Hillstrom said. “I just can’t do that.”

How much is the city spending?

The budget totals $81 million. That’s up 6.4%.

What’s it going to cost me?

The tax levy necessary to support the budget is $21.5 million, a 5.4% increase.

The assessed tax rate will increase 6.8% to $7.02 per $1,000 of valuation. The owner of a $275,000 home will pay $1,931 in property taxes for city services next year. That’s an increase of $124.

The total will be offset somewhat by the removal of the $40 TARF, which was paid through utility bills.

The budget increases other fees. Neenah’s annual stormwater fee will rise from $84 to $90 per equivalent runoff unit, and the city’s annual recycling fee will rise from $42 to $47.

When am I going to get the bill?

Rasmussen said property tax bills will be mailed in the first half of December.

The shore wall at Doty Park in Neenah needs to be repaired or replaced.

What are the major capital projects?

The budget includes $21.5 million for capital projects, $18.1 million of which will be funded by borrowing. That’s well above the 10-year average of $11.2 million in annual borrowing.

Notable capital expenditures include:

$3.1 million to stabilize and improve the shoreline at Doty Park. Neenah secured a $1 million grant from the Wisconsin Department of Natural Resources to partially offset the cost.
$3 million to complete the first phase of a $6 million remodeling of Fire Station 31 at 1080 Breezewood Lane. The station also houses the city’s employee health clinic and a server room for the Information Systems Department.
$2.4 million to pay the city’s share of reconstructing South Commercial Street between Winneconne Avenue and Stanley Street. The project is estimated to cost $9.3 million, with $6.9 million coming from federal funds administered by the Wisconsin Department of Transportation.
$1 million to develop Arrowhead Park. The money will be carried forward from previous budgets.
$611,000 to pay for Neenah’s share of a $1 million improvement to the Neenah-Menasha Fire Rescue training tower. Menasha will be responsible for $389,000. The cities received a $500,000 grant from Winnebago County to partially offset the cost.
$500,000 to install a 12-inch water main across the Fox River to serve Doty Island. The new main will be mounted on the Wayne Bryan (Oak Street) Bridge and eventually will replace two older mains on the riverbed.
$500,000 to develop stormwater ponds.
$489,000 to pay for Neenah’s share of an $800,000 heavy-duty rescue vehicle for Neenah-Menasha Fire Rescue. Menasha will pay $311,000.
$475,000 to replace the windows and entry doors at City Hall.
$400,000 to rebuild the tennis courts at Southview Park.
$130,000 to add sidewalks on both sides of Bruce Street between Alexander Drive and Castle Oak Drive.
$100,000 to begin the development of Carpenter Preserve.

The council cut several projects from the budget, including $1.4 million to reconstruct Bergstrom Road between Breezewood Lane and Winnebago County G. The pavement is rated as poor.

The council also cut $65,000 to install sidewalks on Alexander Drive after residents argued the sidewalks weren’t needed or wanted.

Contact Duke Behnke at 920-993-7176 or dbehnke@gannett.com. Follow him on X, formerly Twitter, at @DukeBehnke.

This article originally appeared on Appleton Post-Crescent: Neenah homeowners take hit for removal of contested transportation fee

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